Used EVs become more attractive as prices fall and inventory grows

Almost 22,000 used electric cars were sold in the month of July, which is nearly three times the volume of transactions seen in the same month in 2023, new market analysis shows. But this rise in sales is being driven by an increasing imbalance between ever-expanding stock levels and limited public demand, which has seen depreciation hit hard and used prices tumble.

As such, a two-year-old EV is now typically losing more than half of its original value, while the average petrol , diesel and hybrid model retains around three quarters of its first purchase 'list' price. Fuelling this dramatic fall in residual values has been the Labour Government's recent decision to tax EVs for the first time in April, and a flood of announcements by car makers that they are delaying new electric models and plans to go fully electric amidst slower-than-anticipated sales of new EVs.

Confirmation in April that hybrid cars will be on sale until 2035 - five years after new petrol and diesel models will be outlawed by ministers - has also seen appetite for these cars grow both on the new and used market in recent months. Experts say this is making EVs 'more attractive' to second-hand car buyers, who can currently get their hands on a more premium model on the same budget if they choose battery power over petrol or diesel. Statistics supplied by automotive intelligence provider Marketcheck UK shows that used EV stock has boomed by 149 per cent between July 2023 and 2025.

Retailers had just 21,995 battery-powered cars on their forecourts in July two years ago, while this year's inventory was far greater at 54,720 vehicles. And the increase in availability has translated to a 192 per cent jump in sales, rising from 7,512 to 21,902 EVs being snapped up. But there has also been a significant decline in prices over the same period, which reflects the increase in competition. Based on data collated from 11,500 UK retailers, the average advertised price for an EV slipped by 19 per cent, falling more than £5,000 from £27,762 to £22,547 in the 24-month spell.

Comparing this to average used petrol car prices shows not only the far smaller scale of second-hand EV market but also less price volatility triggered by stock, driver demand, Government announcements and the economic climate. Retailers had 29 per cent more inventory of second-hand petrol models in their showrooms and forecourts in July 2025 (484,348) versus the same month two years earlier (376,517), which translated to more sales. Dealers shifted 40 per cent more cars, with retailers moving on 193,637 used petrol examples during the seventh month of this year, compared to only 138,782 in July 2023. Yet petrol car prices have remained far more stable, dropping by less than 5 per cent (from £16,165 to £15,386) despite the increase in choice available to customers.

Alastair Campbell from Marketcheck UK said the data suggests the used EV market is 'hitting its stride' with the 'highest number of used examples ever sold in a single month, and at the lowest average price we’ve recorded'. He added: 'In just two years, prices have dropped by more than £5,000, while sales volumes have surged. That combination of falling prices and rising demand shows the market is becoming both more accessible and more mature. For many UK buyers, a used EV is now a realistic and attractive alternative to petrol and diesel.' Separate analysis by Cox Automotive also reveals a bigger contraction in values for EVs compared to other fuel types. For the same month of July 2025, the average two-year-old EV retains just 46 per cent of its list price.

This is based on the recommended retail price of electric cars two years ago (and not the price paid by drivers who likely paid a discounted rate) versus their auction sale value last month. While this is particularly bad news for owners who bought new EVs outright - and for finance companies who are being left with less valuable cars at the end of customer contracts - the substantial deprecation means second-hand buyers are getting far more motor for their money if choosing electric. Using the same measure, 24-month-old petrol cars hold on to 64 per cent of their original price. Diesels have slightly better residual values, retaining 65 per cent, while hybrids perform best, keeping 66 per cent of their new price after two years. But this hasn't always been the case.

Reviewing Cox Automotive's historical data, it shows that in November 2022, hybrid and EV residual values were achieving near parity, retaining 90 per cent and 88 per cent of their new price respectively - a stark contrast to the depreciation seen today. Philip Nothard, insight director at the automotive group, said: 'Hybrid vehicles are a lucrative opportunity for UK drivers and the automotive market today, which is evident in the success of many new market entrants coming to the UK with hybrid offerings. They deliver a clear lifetime cost advantage over internal combustion and electric vehicles, making them an attractive option for buyers hesitant or cautious about making the full electric transition.' In April, Chancellor Rachel Reeves ushered in car tax changes, headlined by new costs for EV buyers and existing owners.

Those who already own an EV registered after April 2017 will have to pay an annual Vehicle Excise Duty standard rate of £195 - the same amount levied on drivers of combustion-engine models. New models purchased after 1 April 2025 with a list price above £40,000 will also be stung by the Expensive Car Supplement - a premium tax levied on new petrol and diesel models. This is a £425-a-year additional charge on top of the £195 standard rate for five years, seeing owners hit with a £620 annual bill. However, in a leaked letter from a Labour minister seen by the Daily Mail earlier this year, they suggested that the £40,000 threshold for EVs could be increased to take into account the typical premium price of battery models.